The British wireless giant Vodafone has approached Kabel Deutschland of Germany over a potential takeover that could be worth more than $10 billion, DealBook’s Mark Scott reports. An acquisition would allow Vodafone, which owns 45 percent of Verizon Wireless, to expand its cellphone operations in Germany and offset increasing competition.
“Kabel Deutschland does not just represent an opportunity for Vodafone to extract synergies but also to better defend its core business,†telecommunications analysts at Espirito Santo in London told investors in a research note on Wednesday. The potential acquisition would be Vodafone’s largest since it bought a controlling stake in Hutchison Essar of India for $11 billion in 2007, Mr. Scott writes.
THE END OF LOW RATES  | Interest rates may have reached a bottom, Nathaniel Popper and Peter Eavis write in DealBook. It has been a fact of life since the early 1980s that the rate charged by lenders has gone down, reaching historic lows after the financial crisis with the Federal Reserve’s stimulus measures. But over the last few months, investors and banks have been demanding higher payments for their loans, pushing up interest rates and bond yields. The cost of mortgages has been going up in recent weeks, and governments are now facing the prospect of higher borrowing costs down the road.
The first tremors were felt in products reliant on low rates, like bonds issued by American companies, but the movement is spreading more broadly. Global markets in bonds, currencies and stocks have experienced spasms of turmoil. “I think you all should be ready, because rates are going to go up,†Jamie Dimon, the chief executive of JPMorgan Chase, told a financial industry conference at the Waldorf-Astoria Hotel in Manhattan on Tuesday.
Recent economic reports suggest the economy is slowly recovering, leading many on Wall Street to prepare for the Federal Reserve to pare its stimulus program. If rates continue rising, a wide array of market participants will have to shift their assumptions. “When past performance has been so consistent, the risk that investors underestimate the risk, I think has consistently been an issue,†said Richard G. Ketchum, president of the Financial Industry Regulatory Authority.
MISSED OPPORTUNITY OF THE JOBS ACT  | The Jump-Start Our Business Start-Ups Act was supposed to help revive new company offerings. Now, more than a year after the legislation was passed, the market for I.P.O.’s is indeed heating up, but the JOBS Act “has had little to do with it,†Steven M. Davidoff writes in the Deal Professor column.
Take the recent I.P.O. of the upscale grocer Fairway Group Holding. “Fairway’s selective use of the JOBS Act shows that it is being used to avoid disclosure of information that may cause embarrassment to the company or alert investors of problems. But at the same time, it shows that the law may have allowed companies to get away with not disclosing financial information that investors value,†Mr. Davidoff writes. “None of this has anything to do with whether Fairway would have gone public.â€
ON THE AGENDA Â |Â Coty is expected to price its initial public offering Wednesday evening. H&R Block reports earnings after the market closes. The venture capitalist Marc Andreessen is on CNBC at 8 a.m. John Thain, head of the CIT Group, is on Bloomberg TV at 11 a.m.
REGULATOR SAYS INSURERS INFLATING BOOKS  | “New York State regulators are calling for a nationwide moratorium on transactions that life insurers are using to alter their books by billions of dollars, saying that the deals put policyholders at risk and could lead to another taxpayer bailout,†Mary Williams Walsh reports in DealBook. “Insurers’ use of the secretive transactions has become widespread, nearly doubling over the last five years. The deals now affect life insurance policies worth trillions of dollars, according to an analysis done for The New York Times by SNL Financial, a research and data firm.â€
“Benjamin M. Lawsky, New York’s superintendent of financial services, said that life insurers based in New York had alone burnished their books by $48 billion, using what he called ‘shadow insurance,’ according to an investigation conducted by his department. He issued a report about the investigation late Tuesday. The transactions are so opaque that Mr. Lawsky said it took his team of investigators nearly a year to follow the paper trail, even though they had the power to subpoena documents.â€
Sprint and SoftBank Shore Up Defenses Against a Dish Counterbid  | In raising its bid for Sprint Nextel, SoftBank of Japan is doing its best to make sure Dish Network will have a harder time fighting back. DealBook »
Pandora Buys a South Dakota Radio Station  | Pandora Media said the acquisition would give the Internet radio company access to the rights and prices that competitors enjoy, Bloomberg News reports. BLOOMBERG NEWS
The Cost of Health Care Mergers  | The elephant in the room in the debate over the soaring cost of health care is “a lack of competition in what is now America’s biggest business,†Eduardo Porter writes in the Economic Scene column of The New York Times. NEW YORK TIMES
Investor Group Ends Bid for British Water Utility  | An effort by an investment consortium to buy the British water utility Severn Trent fell apart on Tuesday as the two sides failed to enter into talks before a deadline. DealBook »
Google Buys Waze for $1 Billion  | Google did not disclose the purchase price for Waze, a social mapping start-up, but a person with knowledge of the transaction said it was $1.03 billion, Vindu Goel reports in the Bits blog of The New York Times. NEW YORK TIMES BITS
Taking Dole Private Is Latest Challenge for 90-Year-Old Billionaire  | David H. Murdock once took Dole Food private. Now he is betting that he can do it again.
DEALBOOK
Glencore Xstrata Names Mack to Its Board  | Glencore Xstrata has named Morgan Stanley’s former chief executive, John J. Mack, and the executive chairman of the information provider Bloomberg L.P., Peter T. Grauer, as nonexecutive directors of its board. DealBook »
No ‘Hiding’ at JPMorgan Over Trading Loss, Dimon Says  | Jamie Dimon said JPMorgan Chase would fight anyone thinking of suing the bank over its multibillion-dollar trading loss last year. “There was no hiding, there was no lying,†Mr. Dimon said at an event in New York on Tuesday, according to Bloomberg News. BLOOMBERG NEWS
What Higher Rates Might Look Like  | “A return to normality eventually implies a benchmark 10-year Treasury yield of 4 percent or more. It won’t happen all at once, but that’s where we’re heading,†Jim O’Neill, former chairman of Goldman Sachs Asset Management, writes in Bloomberg View. BLOOMBERG VIEW
Berkshire Hathaway’s Rising Star  | At 28 years old, Tracy Britt is becoming one of Warren E. Buffett’s top lieutenants, The Wall Street Journal writes. “With an office next to Mr. Buffett’s at Berkshire’s headquarters, Ms. Britt helps with financial research, accompanies Mr. Buffett to meetings and occasionally drives him around town,†the newspaper writes. WALL STREET JOURNAL
Carlyle Said to Seek $4 Billion for Real Estate Fund  | The Carlyle Group plans to begin raising what “would be one of the largest new property funds any firm has raised since the financial crisis,†The Wall Street Journal reports. WALL STREET JOURNAL
Private Equity Capitalizes on Chinese Firms’ Depressed Shares  | The tale of Ambow Education Holding, a troubled operator of tutoring centers in China that was listed on the New York Stock Exchange, illustrates how private equity has sought to cash in on the rapid descents of such firms. DealBook »
Executive Departs Providence Equity Partners in Asia  | Patrick Corso stepped down as head of the Hong Kong office of Providence Equity Partners, Reuters reports, citing unidentified people familiar with the matter. REUTERS
Paulson’s Gold Fund Suffers Additional Losses  | The hedge fund manager John A. Paulson oversaw a 13 percent decline in his gold fund in May, bringing losses in the strategy to 54 percent since the start of the year, Bloomberg News reports, citing a letter to investors. BLOOMBERG NEWS
From U.S. Prosecutor’s Office to Hedge Fund P.R.  | Ellen Davis, a spokeswoman for the United States attorney’s office in Manhattan, is leaving to join Sard Verbinnen, a public relations group that represents Steven A. Cohen’s hedge fund, reports Reuters. DealBook »
Facebook Investors Air Their Grievances  | Facebook faced frustrated investors on Tuesday at the company’s first annual meeting. “We’re disappointed with the performance of the stock over the last year,†said Mark Zuckerberg, the chief executive, according to The Wall Street Journal. “We expect there’s going to be fluctuations.†WALL STREET JOURNAL
Nomura Real Estate Trust Falls in Trading Debut  | The Nomura real estate master fund, which raised about $1.8 billion in an initial public offering, fell 6.2 percent in its trading debut in Tokyo, Bloomberg News reports. BLOOMBERG NEWS
Box, a Cloud Start-Up, Said to Be in Talks Over Credit Line  | The Financial Times reports: “At least three banks are in talks to extend a credit line to Box ahead of a potential public offering for the enterprise software start-up, underscoring the lengths to which banks are willing to go to secure potentially lucrative relationships with private technology companies.†FINANCIAL TIMES
Rigging Currency Rates for Profit  | Bloomberg News reports: “Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice.†BLOOMBERG NEWS
Banks Get 2 Years to Comply With Swaps Trading Rule  |Â
REUTERS
S.E.C. Fines Options Exchange for Lax Oversight  | The agency fined the Chicago Board Options Exchange and its affiliate $6 million in what was the first action related to an exchange’s responsibility to self-police its market. DealBook »
Japan’s Central Bank Stays the Course  | The Bank of Japan held its policy steady in spite of recent market volatility, The New York Times reports. NEW YORK TIMES
MBIA Fails in Legal Challenge Over Bond Deal  | MBIA lost a lawsuit it filed in 2009 against Patriarch Partners, The Wall Street Journal reports. WALL STREET JOURNAL
